Greek shares hit a two-and-a-half year low yesterday and borrowing costs soared amid warnings that an exit from the eurozone would lead to ‘very dangerous instability’ across the region.

The stock exchange in Athens fell 3.3 per cent to its lowest level since September 2012 as Piraeus Bank tumbled 9.5 per cent and National Bank of Greece sank 7.3 per cent.

At the same time, borrowing costs spiked higher with the yield on two-year bonds heading towards 29 per cent and the 10-year bond yield above 13 per cent.

Shares: Yesterday the stock exchange in Athens fell 3.3 per cent to its lowest level since September 2012

The euro was also on the slide against sterling, falling as low as 71.71p, making £1 worth €1.3945 at one stage. It is feared that Greece will default on its debts in the coming weeks – plunging the country deeper into crisis and potentially forcing it out of the eurozone.

Dutch finance minister Jeroen Dijsselbloem, president of the Eurogroup of finance ministers, said Greece must meet its obligations if it wants to remain in the single currency bloc.